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Describes a methodology, called CUTE, after the ESPRIT‐project CUTE (Continuous Improvement using Information Technology towards Excellence) which was aimed at the development of a software‐aided tool to support companies, in particular small and medium‐sized enterprises (SMEs) with the development of a sustained CI process. CUTE is based on a variety of hitherto mostly separate disciplines, in particular organisation design, operations management, innovation management and information technology. The methodology guides the user through a number of steps in which causes of poor performance are revealed, ways to develop improvement suggestions are generated, and the company’s capabilities to further develop and implement those suggestions are assessed. Through the ongoing development, implementation and evaluation of improvements both the company’s performance and its CI capabilities are improved continuously. A first test of the methodology has shown that CUTE helps users to increase their understanding of their operations and performance, and that the methodology provides a stimulus for starting focused improvement activities.